Codified as § 33-24-102, Montana’s Valued Coverage Regulation supplies that, within the occasion of a complete loss, the bounds in an actual property insurance coverage coverage conclusively set the true quantity of loss and measure of damages. In apply, worth coverage legal guidelines mandate {that a} complete loss robotically triggers an insurer’s obligation to pay the total coverage limits, typically with out the necessity for a proof of loss or different investigation. 1 Any settlement to settle a declare for lower than the entire quantity of relevant protection is void as in opposition to public coverage. 2
Much less clear is the interplay between a worth coverage regulation and supplemental coverages, that are paid as incurred, reminiscent of prolonged dwelling or regulation and ordinance protection. Whereas Montana courts haven’t had trigger to guage this interplay, different courts in worth coverage regulation states have. In Langhorne v. Fireman’s Fund Insurance coverage Firm, the Northern District of Florida held that the insurer was not obligated to pay prolonged substitute value protection till incurred.
Within the court docket’s view, there isn’t any battle between the EERC [extended replacement cost coverage] endorsement within the coverage and the plain, unambiguous language of the [value policy law]. The court docket subsequently concludes that as a result of up to now plaintiff has not ‘really expended’ any quantity to restore, rebuild, or change his dwelling, defendant has no obligation to pay him below the ERCC endorsement. 3
The Florida Supreme Court docket later thought of and in the end accepted the Langhorne reasoning when deciding Ceballo v. Residents Property Insurance coverage Company, the same case. It discovered that the insureds had been “entitled to, and obtained, the face worth of their insurance coverage coverage for the lack of their house, however that loss doesn’t have an effect on their obligation to indicate that they’ve incurred an extra loss so as to get better below the supplemental protection.” 4
Whereas Florida’s statute is barely totally different than Montana’s, in Florida, the valued coverage regulation doesn’t apply to supplemental coverages. Langhorne and Ceballo present perception into how courts interpreted and differentiated coverages that impose no situations above and past sustaining a coated loss and supplemental coverages which might be conditioned on incurring related prices. Whereas there isn’t any assure {that a} Montana court docket would come to the identical conclusion, these opinions from Florida would seemingly be thought of persuasive ought to the problem come up.
1 Britton v. Farmers Ins. Grp. (Truck Ins. Exch.), 721 P.2nd 303, 307 (Mont. 1986) (citing Industrial Union Ins. Co. v. Stanmike Funding Co., 475 S.W.2nd 295 (Tex.C.A.1971)).
2 Stanmike Funding, at 307 (citing Coddington v. Safeguard Ins. Co. of N.Y., 373 S.W.2nd 413 (Ark. 1963).
3 Langhorne v. Fireman’s Fund Ins. Co., 432 F. Supp. 2nd 1274, 1279 (N.D. Fla. 2006).
4 Ceballo v. Residents Prop. Ins. Corp., 967 So. 2nd 811, 815 (Fla. 2007).
